In 1996, the National Defense Authorization Act was put in place, allowing partnerships between the military and private developers to refurbish 300,000 units of older military housing and to construct another 300,000 units. About three years ago, Gateway was formed specifically to target that market. It is a partnership between Pinnacle Realty Management Co. (owned by John Goodman and Stan Harrelson of Seattle) and former military advisor Dan Lund. As lead consultant, Lund, of Annapolis, Md., were instrumental in writing the privatization plan for the military.

Stan Harrelson, president and CEO of Pinnacle tells GlobeSt that as a service provider involved in managing residential properties across the country, military housing was "a natural alignment." Pinnacle believed its managerial expertise could alleviate one of the main criticisms of military housing: lack of customer service.

Lund, now president of Gateway, was with OA Partners, a boutique real estate development-consulting firm in Maryland when he consulted with the military about its need for more on-base housing. Lund tells GlobeSt that military personnel have to spend an average of up to two years on a waiting list to obtain affordable housing on base, especially junior personnel.

"Many don't bother getting on the list because they know their tour of duty is shorter than the waiting time," says Lund – speaking from first hand experience. Once full-time in the Mariness, he is still a member of the Reserves. Lund explains that average only about 25 percent of military personnel are housed on base. When a family's military member is deployed for a long time, living on base "provides a strong sense of community and support for the family," says Lund, "which was a strong reason for the renovations and new housing." He chose to leave OA to participate in Gateway as it was "a good business opportunity to make a reasonable profit while doing something good for the people who put their lives on the line for us."

Lund says the project has a 15-month construction schedule, with the first 30 units of Carroll's Creek expected by October this year and full development "probably by late spring" 2002.

Instant Insights /

Gateway Development and U.S. Navy Break Ground on $43-Mil Housing Project

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